Comcast to buy DreamWorks Animation for $3.8 billion

Comcast Corp, the owner of NBCUniversal, said on Thursday it would buy Hollywood movie studio DreamWorks Animation SKG Inc for $3.8 billion to boost its family-friendly offerings and help it take on No. 1 player Walt Disney.Reuters | April 29, 2016, 12:23 IST

Comcast's acquisition of DreamWorks Animation will add to Universal's film library major childrens' franchises such as Shrek and Kung Fu Panda, which it could tap for its theme parks and consumer products businesses.

Comcast's Universal Pictures has shown signs of success with family films like Despicable Me and Minions, but this deal will ramp up its portfolio and fledgling animation business Illumination Entertainment.

DreamWorks' burgeoning TV business will also be a boon to Universal, Macquarie analyst Amy Yong said in a research note. DreamWorks signed a deal earlier this year with Netflix to distribute series such as The Adventures of Puss in Boots and develop original series on the streaming subscription service.

The $41-per-share cash offer represents a premium of about 27% to DreamWorks' Wednesday close. DreamWorks shares, which have gained nearly 50% in the last six months, soared 24% to $39.95 per share on Thursday .

DreamWorks CEO Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will include the company's ownership interests in Awesomeness TV and NOVA. He will also serve as a consultant to NBCUniversal.

DreamWorks Animation was spun off in 2004 from DreamWorks Studios, founded in 1994 by Katzenberg, Steven Spielberg and David Geffen. The animation studio had come close to being sold before but never sealed the deal.

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